This Uranium Stock Should Be At The Top Of Your List!
A Uranium Stock For Nuclear Profits!
Thanks to Japan’s disastrous 2011 Fukushima nuclear meltdown, the price of uranium has been in the dumps for years. But as we talked about a few months ago, there’s a burgeoning price recovery developing for the commodity.
With a number of Japanese nuclear reactors on the verge of restarting, uranium demand is set to swing higher.
But the road to a Japanese nuclear restart is a bumpy one…
As it sits now, proponents of the plan are still stuck in numerous court battles. Understandably, Japanese residents are concerned about the return to nuclear energy, and they’re filing court claims to stop it.
In fact, residents were successful in temporarily blocking the restart of two reactors in Takahama, a nuclear plant on the Japan Sea coast.
However, residents recently lost a bid to block two reactors from restarting in Sendai. Officials say the plants in Southwestern Japan could return to operation as soon as June 2015.
While I understand the obvious safety concerns of nuclear power in a country prone to massive earthquakes, it’s likely Japan eventually restarts the majority of their 48 nuclear reactors.
Why?
The country’s economy is suffering due its massive reliance on imported fossil fuels. As a matter of fact, recent customs data reveals Japan imported $65 billion worth of liquefied natural gas last year- a record high.
A switch back to nuclear will go a long way towards reducing this massive energy bill.
What’s the best way to invest for a Japanese nuclear restart?
One Nuclear Stock Shines Bright!
There’s no question uranium miners will benefit from a price resurgence in the commodity they produce. But keep in mind, navigating the uranium mining industry can be a bit tricky these days.
After all, there are a number of small-cap US miners with substantial debt and little to no revenue.
Instead of diving into this risky arena, consider this company…
Cameco Corporation $CCJ is a mid-cap producer accounting for 16% of global uranium production from its US, Canadian, and Kazakhstan operations.
And that’s not all…
The company is also a leader in the uranium refining industry. As you may know, uranium ore must go through a complex process before it can be used as a nuclear fuel.
As far as the company’s financials go, they have some of the best in the industry. Not only is Cameco solidly profitable, but it has ample liquidity and low debt- three factors hard to come by at once in the uranium mining/refining industry.
But perhaps the best part about Cameco is this…
As you can see from this long-term chart, shares are trading within a stone’s throw of the 2009 lows at $12.50.
This huge technical support level will likely keep bears at bay going forward.
While it’s still possible we see a complete retest of the 2009 low, I would use it as a buying opportunity if it did. This company simply has too much going for it for shares to drop much further than that.
And before I forget…
Cameco pays investors a respectable 2% dividend, which means you’ll be paid to wait for the inevitable resurgence in the global nuclear power industry!
Inevitable Nuclear Resurgence: Really?
According to the International Energy Agency (IEA), global nuclear generation capacity will rise 60% between now and 2040.
While 148 GW of nuclear capacity will be retired due to the shuttering of old plants, 380 GW of capacity will be added to help fuel society’s insatiable need for electricity.
Most of the growth will come from China…
The populous nation will add 132 GW of nuclear capacity, which will eventually eclipse the current installed capacity of the US and Russia- combined!
With nuclear energy demand set to explode in coming years, now’s the time for patient investors to take a close look at Cameco.
And remember…
If you’re still unconvinced of Cameco’s potential, there’s always the Market Vectors Uranium+Nuclear Energy $NLR.
The exchange traded fund (ETF) holds 53 companies involved in uranium mining and/or nuclear power generation. Therefore you get instant diversification in an industry that’s virtually guaranteed to grow by leaps and bounds in coming years!
Until Next Time,
Justin Bennett
Commodity Trading Research
****Disclosure*** Editor Justin Bennett is long $CCJ
BIO: Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com. With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them. Sign up for our free reports and commodity newsletter at http://commoditytradingresearch.com/free-sign-up.
Category: Commodities
